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Currency war Colombia style
That’s how Juan Manuel Santos, president of Colombia, broadcast a request to state oil group Ecopetrol on Wednesday, asking it to delay paying the government about $6bn in dividends. Why? The fast-appreciating peso is threatening exports and jobs.
Turkey: hold your horses
While the general consensus is that the 2012 rally in emerging market equities still has further to go, it is far from unanimous.
Here’s a note of caution about Turkey from Morgan Stanley in a report headlined Turkey: Tread Carefully, Downgrade to UW [underweight]. After a 26.2 per cent gain this year, in dollar terms, the risks far outweigh the rewards, says the bank which much prefers other EMs in the region – for example, Russia.
Bharti Airtel faces $3.1bn suit
An update to the dispute between Bharti Airtel, India’s largest telecoms group, and Econet Wireless, a rival which operates mostly in Zimbabwe, over Bharti’s Nigerian unit.
According to a suit filed on Wedensday, Econet is seeking at least $3.1 billion in damages from the Indian group. This comes after a ruling in January that declared Bharti’s ownership of Airtel Nigeria “null and void” because Econet, a 5 per cent shareholder in the original business, was not consulted on the transfer.
Ukraine: don’t bet the farm
Ben Seeder of Business New Europe
Nearly five years after launching at the peak of Ukraine’s property market boom, one of the country’s leading real estate funds is struggling to reassure dismayed shareholders after the decision to spend third of the fund’s money on buying small farm plots has not worked out as well as expected.
It doesn’t help that the overall real estate sector in Ukraine tanked in 2009-10, either. What are the prospects of a recovery?
Ashmore Group: keeping the faith
The second half of 2011 was a good time to be a shareholder in Ashmore Group, the specialist emerging market fund manager. It was not such a good time to be invested in its funds. Revenues, profits and dividends were up; assets under management were down.
But its customers kept the faith, with net inflows slightly positive. And Ashmore put a bullish gloss on its performance as it reported unaudited interim figures for the six months to December 31 on Thursday morning. It would be bullish, of course. But it has a case.
Guest post: return of capital is not a vote for the renminbi
By Victor Shih of Northwestern University
In the latest PBOC data release, Chinese banks, including the central bank, bought Rmb140bn worth of foreign currency in January. The increase of “position for foreign exchange purchase” in banks suggests that foreign exchange once again flowed into China, in contrast to the last three months of last year, when FX flowed out of China.
Some analysts interpret this as a return to business as usual as confidence returns to the renminbi. Yet is this the whole picture?
Vietnam equities: attractive but tricky
Like other frontier stock markets that took a beating in recent years such as Egypt and Hungary, Vietnam has rallied this year, up more than 25 per cent since early January.
While sceptics reckon this rally represents the triumph of hope over experience – what traders prefer to call a “dead-cat bounce” – Citi thinks differently, arguing in a 20-page note sent to clients this week that Vietnam “should form a core part of a frontier market portfolio.” Easier said than done?
New Apple fake: sent from my iPhone
There seems to be no limit to Apple-related knock-offs in China. Last year, a fake Apple store in the southwestern Chinese city of Kunming made waves, and fake iPhones and iPads are easily found all over the place.
Now, the latest idea is to pay for a fake ‘sent from my iPhone’ tagline.
Indian IT targets high-end outsourcing
Some leading characters in India’s success story have been showing signs of strain recently. Despite better-than-expected results, IT titans like Infosys were forced to cut forecasts for the fiscal year, prompting investors to sell.
Industry members nevertheless remain confident the sector can sustain its rapid growth – having nearly doubled its revenue to $88bn in the five years to 2011 - in spite of the global economic slowdown and increased competition in the outsourcing sector from other emerging markets like the Philippines.
Guest post: Not so “sweetheart deals” from China in Latin America
By Kevin P. Gallagher, Boston University
Never letting data get in the way of a good story, pundits and policy-makers alike have clamored that Chinese development banks are engaged in “low-ball” finance that is out-competing Western finance in Latin America. Not so simple, not so fast, according to findings in a new study that I co-authored titled “The New Banks in Town: Chinese Finance in Latin America.”
Argentina rail crash: avoidable tragedy?
The train crash at Once station in the heart of Buenos Aires, with forty-nine dead and more than six-hundred injured, is the worst in Argentina in more than forty years.
But for many it was an accident waiting to happen. The opposition, rail users and the train unions have for a long time accused the government and the private train companies of under-investing in the rail network.
Mexico retail: when a drop isn’t a drop
If ever you were looking for misleading statistics, check out Mexico’s December retail sales, which showed a 2.6 fall compared with the previous month.
That, as Reuters reported, was the sharpest month-on-month drop since May 2009, and would seem to indicate dark clouds gathering over Mexico’s economic recovery. Except that there are no dark clouds – at least not yet.
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